Industrial prices rose 3.36% in January 2021 compared with December 2020, a higher increase than that between December and November (0.39%). In January, all of the 24 activities registered positive price changes, against 17 in December.

The Producer Price Index (IPP) of the Mining and Quarrying and Manufacturing Industries measures the evolution of the prices of products "at the factory gate", without taxes and freight. It includes information on the major economic categories, like capital goods, intermediate goods and consumer goods – durable, semi-durable and non-durable.

Industrial prices rose 3.36% between December 2020 and January 2021. The four biggest changes were reported among the products of the following industrial activities: mining and quarrying industries (10.70%), basic metals (6.10%), oil refining and ethanol products (5.30%) and leather products and footwear (5.19%).

In terms of influence over the overall result, mining and quarrying industries (0.59 percentage points), oil refining and ethanol products (0.45 p.p.), basic metals (0.40 p.p.) and other chemicals (0.37 p.p.) stood out.

Comparing January 2021 with January 2020, the price change was of 22.96% against 19.38% in December 2020. The four biggest price changes occurred in mining and quarrying industries (52.91%), basic metals (38.42), wood (35.61%) and food products (34.62%). In this indicator, the sectors that exerted the biggest influence were: food products (7.96 p.p.) mining and quarrying industries (2.51 p.p.), other chemicals (2.31 p.p.) and basic metals (2.29 p.p.).

Among the major economic categories, the influences were: 0.26 p.p. of capital goods, 2.74 p.p. of intermediate goods and 0.36 p.p. of consumer goods. In the case of consumer goods, 0.13 p.p. was due to price changes observed in durable consumer goods and 0.23 p.p. in semi and non-durable consumer goods.

In the cumulative index over 12 months, the price change in the industry reached 22.96% in January, with the following changes: capital goods, 18.62% (1.41 p.p.); intermediate goods, 28.81% (15.55 p.p.); and consumer goods, 15.62% (6.01 p.p.), being the influence of durable consumer goods 0.87 p.p. and of semi and non-durable consumer goods, 5.14 p.p.

The highlights were:

Mining and quarrying industries: the price change in the sector was of 10.70% in January against December, returning to the positive side after two months of negative changes. The change was of 52.91% in the cumulative index in 12 months, an advance of 7.16 p.p. over December (45.75%).

The behavior of the prices in the sector caused the change, in the comparison January 2021/December 2020, to be the most intense among all the activities in the mining and manufacturing industries and to be the sector that mostly influenced the result (0.59 p.p. in 3.36%). It was also the highest change in the comparison between January 2021 and January 2020. In addition, it was the second influence in the cumulative indicator over the last 12 months (2.51 p.p. in 22.96%).

The advance of the prices in January was in line with the devaluation of the real (4.1%) and with the behavior of the prices of "crude petroleum oil" and of the two products of iron ore in the international market.

Food products: in January 2021, the change in the prices of the sector was of 1.26% over the previous month, returning to the positive side after a change of -1.05% in December. As the cumulative indicator in the year in January takes into account the same months, the other indicator to be considered is that one that compares January 2021 with January 2020. This change was of 34.62%, the third highest rate in the time series, losing for October and November 2020 (35.99% and 34.96%, respectively).

The sector stood out due to the fact that it was the fourth highest change in the January 2021/January 2020 comparison and the major influence in the same comparison, accounting for 7.96 p.p. in the 22.96% change of all the sectors of the mining and manufacturing industries.

Among the highlights, two products, ""residue of soybean oil extraction" (with a positive price change) and "sterilized milk/UHT/long life milk" (with a negative change), appeared both as one of the four most intense changes and as one of the four most intense influences. "Crude degummed soybean oil" and "animal feed and other preparations used to feed animals" are the other two products that stood out in terms of influence. The four most influential products accounted for 1.37 p.p. of the change of 1.26%, which meant that -0.11 p.p. was the influence of the other 39 products that comprise the basket of the sector.

The soybean chain explained three rises in terms of influence, since it is an input for "residue of soybean oil extraction", "crude degummed soybean oil" and "animal feed and other preparations used to feed animals". The prices of this commodity were high in the foreign market, leveraged by the exchange rate (in January, the real devaluated 4.1% against the dollar). In the case of "sterilized milk/UHT/long life milk", the retreat in the prices was due to a smaller demand.

Concerning the M/M-12 comparison, the indicator that the sector mostly stood out in the entire industry, soybean derivatives were the highlights once again, as well as "cooled or fresh meat" and "milled or semi-milled rice, even polished or glazed".  These products were influenced by the exchange rate (meat) and by the behavior of the domestic market in mid-2020, coupled with an increase in the prices of the product in the foreign market (rice).

Oil refining and ethanol products: in January, the change in the prices over December 2020 virtually repeated that of December against November: 5.30% in January and 5.32% in December. In any event, the annual comparison pointed to a scenario in which the prices of January 2021 were 1.19% lower than those in January a year ago. It is worth mentioning that the time series peaked in terms of index-number, 121.15, in January 2020.

This sector stood out due to the fact that it registered the third highest change in M/M-1 – which, in January, matches with the cumulative index in the year, both of them comparing January 2021 against December 2020). In addition, it was the second biggest influence in M/M-1: 0.45 p.p. in 3.36% of the overall industry.

Among the products that stood out, "biodiesel" appeared in addition to those linked with "crude petroleum oil", the only one whose prices changed negatively, due to the smaller demand or, which is important to the product, to the low acquisition in bids promoted by the ANP.

Other chemicals: the chemical industry recorded an average change of prices of 4.65% in January 2021 over December 2020, the seventh consecutive increase and the highest positive change since March 2020 (5.49%). Therefore, this sector accrued a positive change of 30.19% in the last 12 months, the highest value in this type of index since October 2018 (33.24%) and nearly 34 p.p. higher than that accrued in 12 months in January 2020.

The results noticed in the last months are mainly linked with the international prices and with the increase of prices of a number of imported inputs, mostly due to the devaluation of the real against the dollar along the year, which hit 4.1% this month and 29.1% in the last 12 months.

Concerning the economic groups of the activity, the highlights were the changes in "manufacture of resins and elastomers" (7.23% this month), thus changing 68.03% in 12 months. Having changed 5.23% this month and 25.93% between January 2020 and January 2021, "manufacture of inorganic chemicals" could be cited as well. In regard to the economic group of "manufacture of pesticides and household disinfectants", the result was -0.85% this month and 10.07% in 12 months.

Concerning the four products that mostly influenced this month´s result (2.47 p.p. in 4.65%), all of them increased their prices: "NPK-based manure and fertilizers", "unsaturated propane (propylene)", "polypropylene (PP)" and "phosphate mineral or chemical manure and fertilizers". The other 35 products of this activity showed a cumulative value of 2.18 p.p.

Basic metals: the comparison of the prices between January 2021 and December 2020 showed a change of 6.10%, the seventh consecutive positive change in this activity. With this result, the sector of basic metals accrued a change of 38.42% over the last 12 months. The monthly and cumulative changes reached the highest values in the entire IPP survey, started in January 2010. Another highlight was that the prices of this sector posted a cumulative change of 40.16% between December 2018 (base of the current time series) and January 2021.

The results of the latest months were a match of the results of steel making groups – linked to steel products – and of non-ferrous material groups – copper, gold and aluminum –, which show a different behavior in terms of prices. The former, linked to the steel making sector, was affected by the prices of iron ore and by the surplus of steel in the world. Despite this surplus, the valuation of the dollar against the real, of 29.1% in the last 12 months and of 4.1% this month, coupled with the increase of the prices of iron ore caused an increase in the prices of the national steel. Concerning the second group – non-ferrous materials –, their prices used to be linked with the quotations in the international stock markets.

Considering the economic groups of this activity, that of steel making changed 5.37%, thus accruing 40.06% in the year.

From the point of view of the four products that mostly influenced this month´s result, the result was of 2.69 p.p. and of 3.41 p.p. in the other 20 products under analysis.

The four products that mostly influenced the results, all of them with positive changes, were: "aluminum oxide (calcined alumina)", "carbon steel ingots, blocks, rods or plates", "uncoated hot-rolled steel carbon coil" and "aluminum plates and strips, more than 0.2 mm thick".

In the analysis of the cumulative index in 12 months, the highlights were: "uncoated hot-rolled steel carbon coil", "carbon steel ingots, blocks, rods or plates", "gold for non-monetary uses" and "carbon steel rebars", all of them with positive results.

Having registered the second highest price change this month and in the cumulative indicator in 12 months, the sector of basic metals stood out in the comparison with the 24 activities of the survey. In both cases, it was positioned after the mining and quarrying activity, where its major input – iron ore – can be found, as well as the third major influence on the month´s results and the fourth one in the cumulative index in the year.